Beyond Oil Warming Handshake: China Brokered Iran-Saudi Détente – Analysis

Introduction:

In March 2023, an agreement brokered by China disrupted the existing dynamics of Middle East diplomacy and posed a challenge to the established sphere of influence maintained by the United States in the region. Notably, China achieved a significant diplomatic feat by orchestrating a reconciliation between Iran and Saudi Arabia, two influential Middle Eastern nations with a deeply entrenched history of hostility. 

China’s aspirations for greater global influence extend beyond its existing engagement in Pakistan, as it actively seeks direct involvement with Saudi Arabia and Iran, recognizing the immense advantages presented by their abundant energy resources and political stability. In light of these developments, this article explores two central questions: Firstly, can the newfound camaraderie between Saudi Arabia and Iran be deemed sustainable? Secondly, does China’s pursuit of engagement with the Middle East indicate an endeavor to capitalize on the declining power of the United States in the region?

Beijing’s Consistent Strategic Maneuvers:

China’s growing engagement with Iran in the Middle East, under President Xi Jinping’s leadership, has gained significant attention. A recent development is the signing of a 25-year cooperation agreement between China and Iran, involving substantial Chinese investments in Iran’s energy sector. However, China’s relationship with Saudi Arabia remains crucial, as it relies on Saudi Arabia as its primary oil supplier. China has been working to strengthen ties with both Iran and Saudi Arabia, playing a role in facilitating the recent reconciliation between these long-standing adversaries.

Saudi Arabia’s decision to restore diplomatic relations with Iran on March 10, 2023, marks a significant shift. Factors motivating Riyadh’s pursuit of reconciliation include a deteriorating relationship with the United States, concerns about Iran’s nuclear program following the breakdown of the Joint Comprehensive Plan of Action in 2018, and an opportunity to de-escalate the conflict in Yemen by encouraging Iran to cease support for the Houthi rebels. Saudi Arabia hopes that China’s involvement can help address these concerns.

For Iran, the reconciliation with Saudi Arabia aligns with its objectives of reducing regional unrest, countering the progress of the Abraham Accords that normalize relations between Israel and Arab nations, and minimizing the risk of military confrontation. Iran sees Israel as a major adversary and aims to prevent Saudi Arabia from normalizing relations with Israel.

The reconciliation between Saudi Arabia and Iran signifies a significant shift in regional dynamics and has the potential to improve relations while addressing key concerns such as U.S. protection for Saudi Arabia and Iran’s nuclear program. It also allows Iran to evade international sanctions and focus on managing challenges on multiple fronts.

China’s interest in this development stems from its broader strategy to establish itself as a prominent global actor. The symbolic significance of a photograph featuring representatives from these three countries is viewed as a significant diplomatic triumph for China. Furthermore, the agreement aligns with China’s interests in securing its energy supply, given that approximately 40-50% of its energy imports originate from the Middle East. In contrast, the United States relies on the region for less than 1 million barrels per day, which constitutes less than 5% of its total consumption. While a Middle East conflict may have limited implications for the United States, it would pose significant challenges for China. From the perspective of the United States, some analysts argue that this agreement signifies a diminishing U.S. influence in the region, suggesting a diplomatic setback.

Ebbing US Influence and Control?

The recent agreement between Tehran and Riyadh is unlikely to significantly diminish US influence in the region. Several factors support this view. Saudi Arabia still relies on the US military industry and plans to expand US presence through a new testing facility. Additionally, Saudi Arabia’s Vision 2030 initiative requires multinational involvement, including US capital. The US is actively engaged in resolving the Yemeni conflict, with peace negotiations underway. However, the agreement is unlikely to resolve tensions between Iran and Saudi Arabia or change Tehran’s support for Saudi adversaries. Saudi Arabia considers Iran’s nuclear program a red line, aligning its position with the US and Israel. While the agreement strengthens China’s position and presents a diplomatic setback for the US, it is unlikely to lead to the demise of US influence. The extent of China’s influence in ensuring compliance and the US response to China’s actions are uncertain. The long-term impact of the agreement on the underlying conflicts between Iran and Saudi Arabia remains unclear.

Moreover, China finds itself in a delicate balancing act, torn between satisfying its short-term energy requirements in Saudi Arabia and pursuing its long-term strategic interests in fostering reconciliation with Tehran. This balancing act necessitates careful navigation, as China endeavors to secure its energy resources while concurrently seeking to build and maintain positive relations with Iran, given the country’s strategic position along China’s Belt and Road Initiative routes in the Middle East and North Africa. With the withdrawal of the United States and Western powers, China will encounter mounting challenges in maintaining an impartial equilibrium between its immediate economic interests in Saudi Arabia and its long-term strategic concerns regarding positive relations with Tehran.

Assorted Outlooks on China’s Balancing Quandary:

The delicate equilibrium that China must achieve between Saudi Arabia and Iran is also influenced by the changing dynamics of China’s foreign policy regarding energy, particularly in the context of the global energy transition. China’s ambitious plans outlined in its 14th Five-Year Plan and China’s Vision 2035 prioritize the development of renewable energy capacities, signaling a significant decrease in the role of oil imports in China’s future energy landscape. As energy dependency gradually diminishes, China is poised to shift its focus towards transcontinental trade and infrastructure connectivity. As mentioned earlier, the integration of Iran into the Belt and Road Initiative (BRI) plans becomes crucial due to Iran’s strategic geographical position. In this context, China risks jeopardizing its long-term strategic infrastructure projects with Iran, a key ally, in exchange for short-term economic gains with Saudi Arabia, a new friend.

Nevertheless, by developing oil dependencies with local exporters, Beijing risks enhancing the strategic leverage wielded by these exporters, who may exploit it to compel China to act against its long-term strategic objectives, particularly regarding its special relationship with Tehran. Therefore, that China should intensify its efforts to enhance its national energy capabilities in order to prevent Middle Eastern oil from undermining its global strategic initiatives. Instead, by prioritizing the expansion of infrastructure connectivity projects such as the BRI, China could reinforce a more resilient position within its triangular relationship involving Iran and Saudi Arabia, safeguarding itself against the entanglements that other powers have experienced due to the region’s conflict-ridden geopolitics.

Conclusion 

The Tehran-Riyadh deal, although significant in terms of China’s expanding influence and Saudi Arabia’s diplomatic maneuvers, is unlikely to result in a substantial decline of U.S. influence in the Middle East. The agreement faces inherent challenges in fully resolving long-standing regional tensions and may not bring about significant changes regarding Iran’s nuclear ambitions, a key concern for Saudi Arabia and its alignment with the U.S. and Israel. Furthermore, the agreement itself is not immune to potential challenges and diplomatic setbacks, given China’s delicate balancing act between its short-term energy needs with Saudi Arabia and its long-term strategic interests with Iran.

The complexities of the Middle East region and the ever-evolving dynamics necessitate a close monitoring of the implementation and long-term effects of this deal. It remains to be seen how China will navigate its dual objectives, seeking to secure energy resources and foster positive relations with Saudi Arabia while simultaneously maintaining its strategic ties with Iran. The efficacy and sustainability of China’s engagement in the region, as well as its ability to effectively address the complex political, security, and economic dynamics, will play a crucial role in shaping the future landscape of the Middle East and the balance of power within it.

About the authors:

• Amit Kumar is a doctoral candidate at the Birla Institute of Technology and Science, in Pilani, India. Previously, he served as a Project Assistant at the Centre for African Justice, Peace, and Human Rights in The Netherlands. He also worked as an Adjunct Researcher at the MirYam Institute in New York. Currently, he is an Associate Editor at The Defence Horizon Journal based in Austria.
• Inès Watrin is a master’s graduate from Sciences Po, Paris, and Peking University, Beijing.